Source: IoT Analytics

Author: Padraig Scully

Published by: IoT Think Tank

Please indicate the source and origin when reprinting

In the segmented IoT platform market, the level of competition is very high. More than 450 companies compete for market share, and the differentiation of each company’s products is very vague, especially for small companies whose products are hard to distinguish from competitors’ services. This has led to 90% of IoT platforms generating less than $10 million in revenue within 2017. When analyzing the marketing information of IoT platforms, we found that the content is very complex, with some focusing on technology and others more concerned with business outcomes.

When analyzing the marketing slogans of 20 leading IoT platform vendors, we found that they did not communicate a clear marketing message to customers. The most commonly used term is “open.” However, the meaning of this word varies greatly from platform to platform.

So, how can IoT platform vendors stand out among many platform providers? Recently, a series of IoT platform market surveys, interviews, and market reports revealed four major strategies.

1. Establish a strong partner ecosystem

To stand out, IoT platform vendors should collaborate with partners from different layers of the technology stack, ideally 2-3 partners per layer of technology.

By collaborating with partners in areas such as hardware, connectivity, cloud, analytics, security, and systems integration, IoT platform vendors can gain support from multiple perspectives, both technological and commercial.

1) Technology: The technological advantages of collaboration allow IoT platform vendors to focus on their core technical strengths while relying on others’ expertise in non-core activities. This helps achieve new levels of innovation and increases the value generated by using the platform. Collaborating with hardware vendors is the most beneficial, as they enable interoperability between platforms and devices. For example, Telit offers its own partner program “Ready for device WISE,” allowing partners to certify their devices accordingly.

2) Business: A strong partner ecosystem opens new business opportunities for projects involving certain partners, even beginning to form joint sales collaborative solutions. System integrators and cloud backend/IaaS vendors can help platform vendors get closer to potential users for sales. In many cases, system integrators have specialized expert teams that have been trained and certified on some larger IoT platforms. Smaller IoT platform vendors find it difficult to approach system integrators unless they bring clients to run PoC or pilot projects together. Therefore, smaller vendors find it easier to discover platform sales leads by collaborating with cloud vendors (like Microsoft or AWS). For example, Device Wise, hosted on Microsoft Azure, has gained many sales leads through Microsoft.

Top-tier IoT platform built through partnerships: Software AG

By comparing relevant data from IoT platform vendors, Software AG, Microsoft, and AWS have built the most established partnerships in the IoT field. The average number of partners among IoT platform vendors in the report is 21. Software AG has 46, Microsoft has 43, and AWS has 43 partners. Their number of partners is more than double the average, allowing them to stand out among many platforms.

The IoT platform Cumulocity was acquired by Software AG in March 2017 and now benefits from Software AG’s extensive partner ecosystem. Since the acquisition, Software AG’s Cumulocity has become one of the top 15 IoT platforms on the market, with Software AG’s strong partner ecosystem opening new doors for them in the market. Microsoft and Amazon have also been actively promoting partnerships with other companies over the past two years. They are now leading the market share with a 90% year-on-year growth rate.

2. Actively showcase customer success stories

IoT platform vendors should take pride in their customers’ successes and leverage these success stories to actively drive business development. Highlighting experiences based on real-world deployments is key to enhancing the platform’s reliability advantage. This case information is crucial for new customers looking to understand the actual experience of using the platform, as they are not merely marketing messages.

Successful platforms generally share their customer success stories through dedicated websites, conferences, and direct email or social media marketing campaigns. Some platforms go further by utilizing their partner ecosystem to do some things. For example, collaborating with partners to educate the market, helping people better understand what the platform is and the benefits of using the platform.

However, some of the surveyed platform companies still do not have a complete successful customer case to publish. For instance, a major IoT platform vendor recently launched a main landing page showcasing its potential customers’ collaborations.

Top-tier IoT platform showcasing customer success stories: C3IoT

C3IoT is a small company that serves as a great example of effectively utilizing its website to demonstrate its platform’s strength. They have an online customer story list and an easily accessible press room page for customer news releases. The latter is a straightforward way to showcase ongoing projects. C3IoT has relatively more public cases, which helps them secure multiple rounds of funding and win large clients like 3M.

Larger IoT platform vendors have more budget to allocate. For example, Microsoft often brings a dozen customers (such as Thyssenkrupp, Rolls-Royce, etc.) to large exhibitions, where they can share their IoT cases or showcase the platform. These customers even become advocates for sharing their experiences using Azure IoT Suite.

3. Higher-level commitment and elevation

Having clear goals and support from top management can even determine the success or failure of an IoT platform, especially for large companies. Top management aligns with the organization’s IoT strategy and actively participates in various marketing efforts for the platform, such as regularly speaking at industry seminars, presenting at technology expos, conducting TV/magazine interviews, and writing relevant thought leadership pieces.

Full support from the leadership team for the IoT platform strategy helps team members build confidence from the inside out. It encourages employees to recognize the IoT strategy and organizational goals and conveys consistent opinions from top to bottom. Customers also see this as a positive factor, as choosing an IoT platform is not easy. They want to select a platform that can support their applications and maintain long-term viability. LogMeIn recently sold its Xively platform to Google because Xively failed to integrate the strategy of existing LogMeIn products and promote the platform from a leadership perspective.

Top-tier IoT platform with high-level commitment: PTC

Siemens, Bosch, and General Electric have all made IoT platforms a core part of their corporate strategy. However, PTC truly stands out as a platform fully committed to the IoT field. PTC’s CEO Jim Heppelman has spent over $600 million in recent years to build their Thingworx platform and refocus the entire company on IoT. It is said that PTC does not have a CTO role, with Heppelman occupying this position, establishing a direct link between his IoT vision as CEO and the transformation of the organizational technology strategy. Heppelmann has also collaborated with renowned business strategist Michael E. Porter to co-author a three-part Harvard Business Review series report on how IoT is changing the competitive landscape and companies. He regularly participates in interviews and gives speeches at conferences.

The commitment and promotion from senior leadership have helped PTC become a leading AEP IoT platform in the market, with over 600 industry customers in the IoT business.

4. Occupy an attractive ecological position

If the first strategy (establishing a partner ecosystem) and the third strategy (commitment from senior leadership) are most applicable to large IoT platform vendors, then occupying a favorable ecological position is more suitable for small IoT platform vendors. Small vendors have the opportunity to stand out by offering products tailored to specific customer needs, specific industries, or containing specific business models. By doing so, these platforms may not attract the masses, but if done deeply, it will give them the opportunity to market their solutions to a small, highly focused group of customers.

Top-tier IoT platform occupying a niche market: Kaa IoT

Various IoT platform vendors seek niche strategies to stand out. For example, Germany-based Adamos targets only machine manufacturers, promising vertical expertise. Israel-based Axonize once had the slogan: “The IoT platform for system integrators.”

One of the most prominent IoT platform companies in our view is Kaa IoT. The company has become one of the few truly open-source platforms, with its source code 100% available to customers. It particularly attracts budget-conscious clients, those looking to avoid vendor lock-in, or those wanting to maintain maximum control over their solutions. The Kaa project was initially launched as an IoT platform project within the software engineering and consulting company CyberVision. After four years of development, in 2016, its senior management split off to establish an independent company, Kaa IoT Technologies, focusing on open-source IoT platforms.

Conclusion

Companies that follow these four actionable strategies may achieve extraordinary results in the emerging multi-billion dollar market. This approach should help companies overcome the current dilemma where only 10% of platform vendors break through the $10 million revenue barrier. Regardless of company strategy, partnerships, and marketing methods, platforms must not forget their primary purpose: to meet customer needs.

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